Ethnic Philanthropy: Dollars from communities of color are increasing

On the 50th anniversary of Brown vs. Board of Education this year, African-American philanthropist Alphonse Fletcher Jr., chairman and chief executive officer of Fletcher Asset Management Inc., donated $50 million to individuals and organizations working to complete the unfinished work of the civil rights movement. Fletcher’s donation is indicative of the rising level of philanthropic giving in communities of color, according to a study published by the Coalition for New Philanthropy, which aims to promote philanthropy in the New York area’s African-American, Asian-American and Latino communities.

Between 2002 and 2003, 166 African-American, Latino and Asian-American donors throughout metropolitan New York were interviewed to determine what motivates donors of color and what they hope to achieve with their giving. The coalition describes those interviewed as well educated with relatively high income; 70 percent reported household income of more than $100,000. Most of the older interviewees hold senior positions in the nonprofit and government sector, while most of the younger donors work in financial services and Wall Street firms. Collectively, their annual monetary giving totals more than $3,000,000, with median household giving of $5,000. Older African-Americans give a median of $7,250, while younger African-Americans give a median of $2,000.

While the study shows some differences across ethnicities—for example, African-Americans give more to their churches, Latinos to community-based organizations and Asian-Americans to ethnic cultural institutions—the most substantial differences are between those born before and those born after the enactment of civil rights legislation and immigration reform in the mid-1960s. Older African-Americans, Latinos and Asian-Americans give more gifts to organizations serving their specific ethnic communities. Younger generations give more to educational programs that offer enrichment and opportunity for high school and college students to succeed in competitive universities and later in high-status occupations.

The most often stated reason for giving more to one organization than another involves a personal connection, such as church membership, organization board service or other volunteer work.

The study found that donors of color are passionate about their philanthropy. They demand a professional presentation of an organization’s mission and purpose, and a detailed accounting of how funding has been allocated as well as a list of specific accomplishments. Each donor also wants a clear picture of how he or she fits into making the organization better and more effective, and the ways in which additional funds will lead to quantitative and qualitative improvements.

There is growing wealth within communities of color, not only in terms of income but also as measured by educational attainment, occupation and home ownership. At the same time, fiscal constraints and shifting governmental priorities have placed an increased burden on community-based organizations to address social problems. To meet these obligations, organizations need to cultivate donors with ties to the community. Because younger donors represent an emerging group of potential philanthropists, one that is likely to grow given current economic and demographic trends, the differences between their giving and that of older generations have important implications for the future of philanthropy and fund-raising efforts, the coalition says.